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The investment — by Intel, I.B.M., Samsung, GlobalFoundries and TSMC — will create 2,500 high-technology jobs as well as 1,900 construction jobs, according to the governor’s office.
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Lobbyists and lawmakers worked on Thursday to prepare new legislation that would give the retailer a one-year reprieve from collecting sales tax in the state. If Amazon cannot get a change in federal tax policy by next June, it will start collecting the tax in September 2012.
Amazon has been resisting a measure passed by legislators at the beginning of the summer mandating that e-commerce companies with subsidiaries in the state collect the taxes. It has spent more than $5 million to gather 500,000 signatures to put the issue on the ballot next June.
Democratic legislators tried this week to come up with a two-thirds vote in the state Senate that would have blocked the ballot measure. They failed. That left them, and Gov. Jerry Brown, with few options except to hope that voters would agree to pay more for online goods.
Why Amazon would agree to surrender even a portion of its fiercely defended competitive advantage is a little mysterious. Some observers speculated that the company was merely buying time and would move its subsidiaries out of California, letting it once again sell in the state without charging the tax.
The retailer, which is getting the most criticism in its history over the tax issue, declined to comment. It has repeatedly said it wants one federal law rather than individual tax provisions in every state.
Amazon was supposed to start collecting the tax under a California law that took effect July 1 but chose to fight instead. If the provisional deal can be completed by the end of the legislative session on Friday, the referendum will be dropped.
The official language of the deal, which was struck late Wednesday, has not been worked out, and participants cautioned that it all could still fall apart. Legislators do not return until January.
“We’re waiting to see the exact words, but we’re hopeful,” said Bill Dombrowski, head of the California Retailers Association. The group was the driving force behind the July law, which was supposed to raise a badly needed $200 million in the current fiscal year.
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BERLIN — When the founders of Shutl, a British courier service that makes deliveries in 90 minutes in busy London, decided to set up a business that ran exclusively on cloud computing, they needed to get creative.
Data privacy laws in Europe forbade the transfer of information about individuals outside the 27-country European Union. That had prevented many companies on the Continent from moving to the cloud, where data may be stored on remote servers in Asia, the United States or elsewhere at a lower cost than what a company would pay for its own servers.
Yet despite the tricky legal landscape, Shutl, now a two-year-old start-up, has become one of Europe’s most avid users of cloud technology. The company carries out more than 1,000 deliveries a day over a cloud network operated by Amazon, the U.S. Web retailer.
Amazon.com, one of the world’s largest sellers of cloud services, helped clinch deals with Shutl and other European businesses, like the French railroad company S.N.C.F. and Bankinter, a Spanish bank, by effectively moving the cloud to Europe by setting up a data center in Dublin. Tom Allason, the Shutl founder and chief executive, said that the company planned to expand from London to all of Britain and Ireland. “Cloud computing helped make Shutl possible,” he said.
While cloud computing remains the exception, not the rule, in Europe, the trend is gaining momentum. According to Gartner, the research firm, annual sales of cloud services in Europe will rise 4.3 percent, to $29.5 billion, in 2015 from $24.7 billion this year.
Sales will still be only roughly half the level of revenue in North America, where remote computing was developed and its biggest sellers — Amazon, Salesforce.com and Microsoft — are leading an industry that Gartner says will generate $60 billion in sales this year.
But in Europe, the willingness of smaller companies like Shutl, and bigger clients like the European Space Agency and the Fraunhofer Institute of Germany, both Amazon clients, to use the cloud are signs that the outsourcing trend is reaching Europe’s shores.
“This is a tectonic shift in computing that is going to take many years to unfold,” said Adam Selipsky, a vice president at Amazon Web Services, the cloud computing arm of the online retailer. “Despite the challenges, on the ground, the cloud is happening in Europe.”
Europe is embracing the cloud despite the complexities of the bloc’s data protection laws. In addition to forbidding the transfer of data on European citizens outside the Union, there are many different versions of what is considered private information and how it is supposed to be handled. That makes it a legal headache to develop standards that satisfy all member states.
For European businesses, cost savings are the cloud’s biggest attraction. Cloud data centers are typically vast collections of computer servers and supporting equipment run by businesses that specialize in wholesale data processing. The centers are designed to provide the most efficient use of all storage and computing power, avoiding costly downtime and lulls typical of smaller businesses.
Mr. Selipsky said that Amazon customers typically saved 25 percent to 30 percent of costs by using its global cloud network instead of maintaining their own computing systems. Amazon allows its clients to store their information at any of its global data centers.
Mr. Allason, the Shutl founder, said that using Amazon’s cloud services had saved him from having to spend £100,000, or $160,000, to set up an internal computing system. He said he had used the savings to build his business, which aggregates and links delivery orders from British retailers like Argos and Oasis to hundreds of local courier services.
Cloud computing could get a lift soon from Brussels, where lawmakers are reviewing the European Union’s data protection directive, which governs how personal information travels within and outside the 27-nation bloc. Viviane Reding, the European commissioner overseeing the revisions, plans to make a proposal this autumn.
Ms. Reding, in an interview, said that businesses and consumers would both benefit from revisions in her proposal, which must be approved by the European Parliament and the Council of Ministers, which is made up of officials designated by each country to represent its interests. The process is not expected to conclude until next year. The Union’s existing data protection directive was adopted in 1995. “The rules are still valid, but the application of the rules must be modified to reflect the realities of the Internet age,” Ms. Reding said.
Article source: http://www.nytimes.com/2011/07/25/technology/europe-turns-to-the-cloud.html?partner=rss&emc=rss
SAN FRANCISCO — Amazon said Monday that it would back a California ballot initiative that would roll back a new state law that forces more online retailers to collect sales tax.
Amazon’s decision to support the proposed referendum pits the world’s biggest online retailer against the state government, which is looking for ways to raise additional revenue to cover budget shortfalls.
The California legislature last month passed a law, now in effect, requiring online retailers to collect sales tax just like merchants physically located in the state. The law was intended to close a loophole that let online retailers sell their wares but not collect and pay sales tax to the state.
Two weeks ago, Amazon, hoping it could comply with the new law and still avoid collecting taxes, severed ties with thousands of California businesses whose Web sites linked to products on its site. California officials say that move does not free it of this year’s tax obligation, estimated at $83 million.
“At a time when businesses are leaving California, it is important to enact policies that attract and encourage business, not drive it away,” said Paul Misener, Amazon’s vice president of public policy. He also called Amazon’s antisales tax position “a referendum on jobs and investment in California.”
Evan Westrup, a spokesman for Gov. Jerry Brown, said Monday that, “Amazon should be spending less time punishing its affiliates, threatening lawsuits and collecting signatures and more time doing what every other retailer does in California every day.”
The collection of online sales tax by states facing budget deficits is an issue that threatens to spill across the country. Amazon has been at loggerheads in various states. The company has severed ties with affiliates in some states, including Illinois, and is in the process of closing a warehouse in Texas.
Amazon currently collects sales tax in New York, even though it says it does not have a physical presence in the state. But it is challenging the state’s law as unconstitutional.
Legally, Californians are still responsible for sales tax even when retailers do not collect it. When filing their tax forms, residents are supposed to declare what they owe in so-called use tax. Most don’t, and the state argues that the growth of online shopping is leading to an ever greater loss of revenue.
The state Board of Equalization, California’s tax collector, estimates the unpaid taxes at $1.15 billion in the last fiscal year, and estimates it will grow to almost $1.2 billion this year and $1.27 billion in 2012.
At the heart of the issue is what constitutes a company’s physical presence. The new California law expands the definition of physical presence to potentially include Amazon subsidiaries, like an office in Cupertino that designs the Kindle book reader and another in Studio City that handles online advertising.
Under the law, if Amazon fails to pay any taxes owed to California, it would be required to pay penalties and interest, like any other tax scofflaw. Its first payment would be due by Oct. 31.
Amazon says it supports a simplified sales tax structure that would be applied evenly across the country, which would require cooperation from federal and state governments. Some state officials say the issue is about more than just tax revenue. They say it’s about fairness to local retailers competing against Amazon but with the added cost to consumers of sales tax.
Supporters of the proposed initiative must now gather around 505,000 signatures to qualify it for the ballot, according to the secretary of state. A vote could occur during the next statewide election in February 2012.
“Where does Amazon plan to collect these signatures — in front of bricks and mortar retailers that collect sales tax everyday?” asked Mr. Westrup.
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Recent weeks have been filled with announcements about music taking residence in the cloud, the poetic name for online storage and software that promises to make lifetimes worth of songs available to anyone, anywhere, as long as those people and places have Internet connections. (Which of course is a long way from everyone, everywhere, but utopian tech dreams tend to ignore mere hardware.)
I can’t wait. Ever since music began migrating online in the 1990s I have longed to make my record collection evaporate — simply to have available the one song I need at any moment, without having to store the rest.
But I have, as they say, special needs. In three decades as a critic I have amassed more vinyl, CDs and digital files than I know what to do with. Periodic weeding can’t keep up with the 20 to 30 discs that arrive in the daily mailbag; the overfull floor-to-ceiling shelves are already straining under thousands of CDs and LPs. Any affection I had for physical packaging, no matter how elegant or unique, has long since vanished; it’s a reference library, not an art collection.
And it grows, and grows, because I never know what I’ll need: the limited-edition 45, the home-burned debut CD. Yet I’d much rather have it in the cloud than in my apartment.
In recent weeks Amazon, Google and Apple have announced services to store individual music collections in the cloud, ready for access online and for syncing to multiple devices. Pandora Internet radio, which extrapolates individual playlists from users’ likes and dislikes, raised hundreds of millions of dollars with a huge initial public offering (followed, however, by a steep drop in stock price; with operating costs and royalties to copyright owners, the company has never made a profit).
Dar.fm recently arrived as a free service that records radio stations — like TiVo for radio — and, as a bonus, conveniently indexes any music from those stations that has been electronically tagged. (Choose a congenial radio station and assemble a well-chosen collection.) Other companies — Rdio, MOG, Napster, Rhapsody — have been offering huge catalogs of music on demand (and transferable to portable devices) for some time as subscription services for a monthly fee, and Spotify, already online in Europe, is likely to join them in the United States soon.
That’s not to mention the many unauthorized sources for music; virtually any album can be found for downloading with a simple search. Free or paid, the cloud is already active.
Dematerializing recorded music has consequences. On the positive side it hugely multiplies the potential audience, letting the music travel fast and far to listeners who would never have known it existed. It escalates music’s portability, as it adds one more previously stand-alone function — like clocks, cameras, calendars, newspapers, video players and games — to the omnivorous smartphone. That’s instant gratification, but with a catch: Smartphones aren’t exactly renowned for sound quality. And the MP3 compression that has made music so portable has already robbed it of some fidelity even before it reaches my earphones.
The ritual of placing an LP on a turntable and cranking up a hi-fi home stereo disappeared — when? Perhaps with the cassette and the Walkman, the ancestor of the portable MP3 player. Now even the thought of having a separate music player is a little quaint. The smartphone will do it all — just adequately, but convenience trumps quality. Baby boomers who remember the transistor radio, that formerly miniature marvel that now looks and feels like a brick compared to current MP3 players, can experience again the sound of an inadequate speaker squeezing out a beloved song.
As the last decade has abundantly proved, freeing music from discs also drives down the price of recorded music, often to zero, dematerializing what used to be an income for musicians and recording companies. Royalties generated from sales of MP3 files and by online subscription services are unlikely to ever make recorded music as profitable as it was in disc form.
There has also been another, far less quantifiable, effect of separating music from its physical package. Songs have become, for lack of a better word, trivial: not through any less effort from the best musicians, but through the unexpected combination of a nearly infinite supply, constant availability, suboptimum sound quality and the intangibility I’ve always thought I would welcome.
This article has been revised to reflect the following correction:
Correction: June 25, 2011
A cover essay this weekend about the online storage of music misstates the name of the Apple service that will scan and recognize music and add Apple’s own copies without uploading. It is iTunesMatch, not iMatch.
Article source: http://feeds.nytimes.com/click.phdo?i=190b2c1765f091bc5a942c9cf7af0f06
Peter DaSilva for The New York TimesA music analyst at Pandora internet radio.
The online music service Pandora may not be profitable, but that hasn’t discouraged investors clamoring for a piece of it.
Pandora Media on Tuesday priced its initial public offering at $16 a share, above its recently raised target range. The company, whose shares will start trading on the New York Stock Exchange on Wednesday under the ticker “P,” has raised $234.9 million, valuing the business at $2.6 billion.
It will sell 14.7 million shares in its market debut, but its lead underwriters, Morgan Stanley, JPMorgan Chase and Citigroup, have the option to sell an additional 2.2 million shares.
It is a big step up for Pandora, which has increased the size of its offering twice in the last month. Last week, the company raised its price target by about $3 a share, to $10 to $12.
The demand for Pandora, a company from Oakland, Calif., that is facing increasing competition from the likes of Amazon and Apple, underscores the market’s heady exuberance for consumer Internet companies. The service, which allows users to build custom radio stations online, has swelled in recent years.
According to its latest filing, the company has more than 90 million registered users and is adding a new user about every second.
Yet, despite its rapidly growing user base, the start-up has struggled to produce a full-year profit.
Revenue more than doubled last year, to $137.8 million, but it recorded a loss of $1.8 million.
“The excitement for Pandora is driven by people’s usage of the service and the enjoyment of the service,” said Richard Greenfield, an analyst with BTIG Research. “But in order to justify a high valuation, they need to get far more advertising and they need to get more people paying for the service.”
Popular but unprofitable has become a common refrain on Wall Street, as more and more young Internet companies race to the public markets.
In part, start-ups are feeling confident in the wake of LinkedIn’s debut in May. Shares of LinkedIn, a professional social network, roared out of gates and more than doubled on their first day of trading. The company eked out a profit last year, but posted notable losses in 2008 and 2009.
The market is also eagerly awaiting the arrival of Groupon, the daily deals site that has already attracted more than $1 billion from venture capital and institutional investors. The site recorded strong growth last year, in revenue and number of subscribers, but its loss topped $450 million amid hefty marketing expenses. The company, which filed to go public earlier this month, may be valued as high as $30 billion in its offering.
“Silicon Valley is just vibrating with excitement right now,” said Bo Brustkern, a managing director at Arcstone Equity Research. “It is reminiscent of 1999, but somewhat different. Valuation bubbles are constrained to just a few segments so far.”
Pandora’s venture capital backers stand to reap a windfall from the offering. Its top three shareholders include Crosslink Capital, which will own 21.9 percent after the offering, Walden Venture Capital, which will own 17.8 percent, and Greylock Partners, which will hold a 13.4 percent stake.
It is a particularly lucrative moment for Crosslink, which is converting a $33 million investment into a stake worth roughly $560 million.
Despite recent investor interest, Pandora’s journey to the public markets has been a rocky one. At several points in the company’s history, a public offering seemed unlikely. The streaming music service has endured several hardships, including severe budget shortfalls and a 2007 showdown with the music industry over royalties.
The fees it pays to record labels for songs remain its largest expense. The cost to acquire content more than doubled last year to $69.4 million.
“As the volume of music we stream to listeners increases, our content acquisition expense will also increase, regardless of whether we are able to generate more revenue,” the company warned in its latest filing.
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Apple has nearly completed its negotiations with the major music publishers over rights for a new cloud music service.
Of the four big publishers, two have signed deals with Apple, and the others will most likely complete their deals in coming days, according to several people involved in the talks.
The agreements will allow Apple to unveil the service at its five-day Worldwide Developers Conference in San Francisco, which begins Monday.
Universal Music Publishing and Sony/ATV, a joint venture between Sony and the estate of Michael Jackson, have completed their deals, these people said. They spoke on condition of anonymity because the deals are confidential.
The publishing division of EMI and Warner/Chappell, owned by the Warner Music Group, are still in talks.
Apple, as well as the labels and publishers, declined to comment.
Publishers, which represent songwriters and control the music and lyrics underlying songs — as opposed to recordings — have been Apple’s last hurdle in setting up its new service, which will allow users to store music files on remote servers and stream or download them over the Internet.
Apple recently closed its deals with the four major record labels. The labels also own the major publishers, but they are operated as separate divisions and sometimes have divergent interests.
Amazon and Google recently introduced cloud music services, but without special licenses from the labels and publishers.
With those licenses, Apple’s system would have some advantages, like being able to instantly scan a user’s iTunes library and match the songs to a master library on Apple’s own servers; with the services of Amazon and Google, users must upload each song, which can take many hours.
In addition, Apple’s service is expected to have features like streaming songs in high-quality audio, even if the version a customer owns is lower quality.
To offer those additional functions, Apple needs licenses from music publishers, because the creation and matching of a master audio library is considered a reproduction, and therefore the owner of the music is owed a royalty. (With the services of Amazon and Google, the music file is treated as a backup, with each user’s songs stored separately.)
On Tuesday, Apple announced that it would be unveiling a program called iCloud at the conference next week, describing it only as a “cloud services offering.”
Analysts and media executives have said that iCloud may offer cloud storage for an array of media, including music, video and photos.
According to several people involved or briefed on the talks, revenue from subscriptions to the service would be divided among Apple, the publishers and the labels, but exactly how that money would be split was unclear. Apple generally keeps 30 percent of such revenue. The publishers had been offered 10.5 percent but were able to negotiate their rate up to 12 percent, these people said.
Whether the 1.5 percent difference would come out of Apple’s share or the labels’ share for the recordings was not known. But the deals are also said to be short-term, and may be superseded when the Copyright Royalty Board, a federal panel, next sets digital royalty rates, a decision that is expected in the next two years.
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“Born This Way” (Interscope), her new album, arrived with a blitz of marketing, and Amazon surprised the singer’s fans by offering a one-day sale of the MP3 version of the album for 99 cents, a full $11 less than its price at iTunes, the Web’s dominant music retailer.
The discount was widely seen as a way for Amazon to promote its new Cloud Drive service, which allows users to store music files on remote servers and stream them over the Internet to their computer or smartphone. But Amazon may have underestimated the zeal (or thrift) of Lady Gaga’s fans. By early afternoon the company’s servers stalled, and many users were unable to download or listen to the album in full. Frustrated customers quickly took to Twitter and to Amazon’s user review page for “Born This Way.”
“Very disappointed,” a customer wrote in a one-star review of the album. “I guess next time I will pay full price and get the album immediately on iTunes.”
Amazon’s only public comment on the matter was a Twitter message, sent about 1:15 p.m. Eastern time: “We’re currently experiencing very high volume. If you order today, you will get the full @ladygaga album for $.99. Thanks for your patience.”
Most music companies see cloud services — which promise that all your music will be available on all your devices at any time — as the next frontier for the industry. And for the retailers and technology companies that will operate them, such services have become in important battleground. Google unveiled its own cloud service, Music Beta, this month, and Apple was said to be close to introducing its own.
Amazon offers customers five free gigabytes of space on its Cloud Service and increases it to 20 gigabytes for customers who buy an album.
“What Amazon is trying to do is build up as much share as possible before Apple comes in,” said Russ Crupnick, an analyst with NPD Group, a market research firm.
Some analysts and music executives said the problem could affect confidence in an unfamiliar technology. Last month a variety of Web sites, from start-ups like GroupMe.com to The New York Times, were affected by a failure on servers that Amazon rents for cloud computing.
“It’s perhaps not a fatal flaw that this happened, but it certainly creates a challenge for them,” said Matthew Eastwood, an analyst at IDC, a firm that researches technology. “There is not a lot of forgiveness for things like this in the market. People will tend to move on and find other suppliers.”
Amazon introduced its MP3 store in 2007, but it has struggled to compete with iTunes. Late last year the NPD Group estimated that iTunes’s share of the digital download market was 66.2 percent and Amazon’s was 13.3 percent.
Amazon often sells albums through one-day promotions for $4 or $5. Music executives have said that Amazon usually accepts the loss if it sells an album for less than the wholesale price charged by the labels, which is typically around $7 an album but may be more for a priority release. Amazon declined to comment beyond its Twitter message, and a representative of Lady Gaga’s record label, Interscope, did not respond to e-mails requesting comment.
Other industry observers questioned whether Amazon’s error with Lady Gaga downloads would have a lasting effect on such a popular store.
“People are having a headache for one dollar,” said Tamara Conniff, a former editor of Billboard who is the founder of TheComet.com, a music news and opinion site. “They’d be willing to try it again for another dollar. Full price is another story.”
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The Tryx ($250) is a very simple camera. It has only two buttons. It has no optical zoom. It doesn’t have an image stabilizer. You can’t remove the battery. You can’t set the aperture or shutter speed. Casio is calling it “the Flip of still cameras.”
That, of course, is a reference to the incredibly simple Flip pocket camcorder. People loved the Flip because it worked: the first time, every time. When something happened worth filming, you pressed the big red button on the back. You didn’t mess with tapes or disks or menus or mode dials or flipping out a screen.
That’s why the Flip became outrageously popular. Its maker sold two million Flips in the first six months. It became the No. 1 bestselling camcorder on Amazon.com, and remained there ever since. As of last month, its sales represented 37 percent of all camcorders, and kept climbing.
And then Cisco killed it.
That’s right. Two years ago, Cisco bought the Flip for $590 million. Then last month, it shut down the whole division and fired 550 people. The blogosphere reverberated with a rationale: “Smartphones killed it. Nobody needs a dedicated recording machine when the phone can record video.”
But if that were true, then Flip sales would not have still been climbing at the time of its demise. If that were true, we wouldn’t still be buying 35 million still cameras a year (phones have still cameras, too). If that were true, nobody would buy GPS units for their cars.
Phone photography, phone video and phone GPS have their places. But they’re different places. They’re additional places. They don’t replace single-purpose gear in their traditional roles. You’re not going to take iPhone pictures of your wedding. Normal people don’t suction-cup their phones to their windshields for navigation. And you won’t be able to fire up the video app on your phone in time to catch your toddler’s sudden adorable burst of singsong.
No, Cisco killed the Flip for its own business reasons — primarily to demonstrate to shareholders, after last year’s stock nose dive, that it’s serious about focusing on its core businesses.
All right, rant over. Now then: the Tryx. This gadget isn’t just dedicated to a single purpose. It’s also dedicated to a single audience: young, fun-loving adults.
It has a lot going for it. First is the wild design. At first glance, it looks exactly like an iPhone: a thin, black slab. And you can use it that way, holding it as you would an app phone.
But the outer edge is, in fact, a sturdy rectangular frame. The body of the camera connects to a hinge at one end of it. You can push it around the hinge in a complete circle, through the frame and back around again. It’s a little bit like those toy gyroscopes. The outer metal circles don’t move — you can grip that framework while the flywheel spins madly inside. (That’s the best analogy I could think of. Leave me alone.)
Once the camera body is rotated away from its starting position, you can also tip it up or down 270 degrees on a second pivot point, so that it points more toward the sky or the ground. Very trycky indeed.
This design makes possible a bunch of neat shooting options. The swiveling camera clicks at 90-degree stopping points, but there’s enough friction that you can stop it at any point. So you can use the frame as a tripod, propping the camera at any angle. You can use the frame as a hanger, so the camera dangles from a branch or wall nail or lamp knob, for superstable shooting. And because the lens is on the frame and not the body, self-portraits are a piece of cake, too.
In these configurations, you’ll usually want to be able to fire the shot without pressing the shutter button. There’s a self-timer, of course, but also a really cool motion-activated shutter. On the supersharp, three-inch touch screen, you drag a hand icon wherever you want — say, the upper-right corner. Then, once you’ve stepped into the frame, you move your hand to that spot in the composition, and wave. Two seconds later, the shot fires. You can wave again for another shot, and another. Absolutely brilliant.
E-mail:pogue@nytimes.com
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A month after Amazon angered music labels by starting a cloud-based music player without their cooperation, Google is doing the same thing.
Google plans to introduce its long-awaited cloud music player Tuesday at Google I/O, its developers conference in San Francisco. The service, which it calls Music Beta by Google, will let people upload their music collections to the Internet and listen to the songs on Android phones or tablets and on computers.
Google does not have licenses from the music labels, even though it has been negotiating with them for months to team up on a cloud service. As a result, users of Google’s service cannot do certain things that would legally require licenses, like sharing songs with friends and buying songs from Google.
“A couple of major labels were not as collaborative and frankly were demanding a set of business terms that were unreasonable and did not allow us to build a product or a business on a sustainable business,” said Jamie Rosenberg, director of digital content for Android. “So we’re not necessarily relying on the partnerships that have proven difficult.”
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